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Ill health early retirement - early employer pension?

I appreciate that this is a "how long is a piece of string' type question as the ultimate decision rests with pension fund trustees, however any guidance (even of the "you're wasting your time" type (but not, please of the "lose weight and pull yourself together type: I have tried those, you know :) )) would be welcome.

I have two deferred final-salary pension schemes one which will pay about £3k at NRD (2022) and one which will pay about £8k at NRD.

I am 50 and in ill-health. Morbidly obese (30st with, therefore increasing pressure on hips and knees further reducing mobility) with a long-term history of chronic depression and anxiety that is resistant to therapy/medication (and caused me to leave my last 2 job and stop the re-training and voluntary work I had started as preparation for a different career).

I have - of course - high blood pressure, was a smoker until 5 years ago and like a tipple! I haven't worked for 4 years, apart from some low-level voluntary and clerical work. My prospects of working at all are low, and of working in anything like my previous jobs (or income levels) absolutely zero.

My personal expectation of life span is around 10 - 15 years maximum (and I'm relaxed about that, it's not an issue), so I'd like to collect some of my pension if I can before shuffling off this moral coil. I'm sure the medical professionals involved in my treatment will support my case.

Is there any point in writing to my ex-employers and can anyone suggest what I should say in order to have them at least consider my case.

Would anyone have a clue as to how much the pension might be reduced by (given that I might reasonably be expected only to draw it as long as the average person would, even if it were paid tomorrow!).

Thanks for anything constructive!

Comments

  • Most schemes don't offer any preferential terms to deferred pensioners retiring through ill-health. Generally, the better terms are only offered to those leaving the company via the ill-health retirement option, as the company will pay for the better pension.

    For deferred pensioners, you often find that the ill-health pension is exactly the same amount as simply asking to take the pension early - which you can now do, as you've reached age 50 (provided the rules allow payment from age 50).

    I would simply ask them if the terms for an ill-health pension are any better than normal early payment of your deferred pension. If not, then simply request early payment and avoid the hassle of the ill-health process.

    Reductions vary for each scheme and once you're retiring more than 10 years early, the scale can be skewed. Usually the reduction is around 6% pa, but it's best simply to approach the schemes and ask for illustrations.
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • ramagel
    ramagel Posts: 61 Forumite
    Most schemes don't offer any preferential terms to deferred pensioners retiring through ill-health.

    Not what I'd hoped to hear, obviously! :) But thanks for the reality check. I will contact my ex employers and see what they have to say.

    Would there be any merit (in the length of a piece of string sense) to taking whatever the 25% tax-free allowance would be and buying an 'impared life' annuity with it?

    We have no other debts, have a £130k ISA pot, and would expect to free £50k maybe more from downsizing when the wife retires. The wife will have a pension about the size of mine I think.

    Am I just being greedy?

    I have 'A' level maths, have always worked in a numerate profession, I understand my investment portfolio, alphas and betas and the like, I listen to Malcolm every time he's on Working Lunch, but I tell you - pension projections leave me completely baffled! Grrr!
  • Spirit_2
    Spirit_2 Posts: 5,546 Forumite
    1,000 Posts Combo Breaker
    Hi Ramagel

    Not money but other kinds of support on MSE are also available.

    Have you considered popping over to the lose weight thread 16, on the I wanna do it board, there is also an Oldstyle lose weight thread, and, on the families board a depression support sub- board.

    Best wishes
    Spirit
  • ramagel
    ramagel Posts: 61 Forumite
    Spirit wrote: »
    Hi Ramagel
    Not money but other kinds of support on MSE are also available.

    Well, well, well: who knew? Thanks!


    By the way I am an EXPERT at losing weight. Trouble is I'm very good at putting it back on, too! (apologies to Oscar Wilde, I think).
  • ramagel wrote: »
    Would there be any merit (in the length of a piece of string sense) to taking whatever the 25% tax-free allowance would be and buying an 'impared life' annuity with it?

    Possibly, but you'd need to get the illustration from the existing pension scheme and then, using the tax free cash, get the impaired annuity quotations. Look very carefully at the pension you give up in the current scheme, compared with the pension you would get from the annuity.
    We have no other debts, have a £130k ISA pot, and would expect to free £50k maybe more from downsizing when the wife retires. The wife will have a pension about the size of mine I think.

    Am I just being greedy?

    Greedy? Or financially prudent? :D It's your money - make it work in the best way for you both :D
    I have 'A' level maths, have always worked in a numerate profession, I understand my investment portfolio, alphas and betas and the like, I listen to Malcolm every time he's on Working Lunch, but I tell you - pension projections leave me completely baffled! Grrr!

    Understand completely. I've worked in pensions for 28 years and I'm with you on that one. Constant meddling by politicians and their appointed quangoes doesn't help.

    Get the illustrations and post them up here (omitting your name, DOB etc - just the numbers). In addition to me (a humble private sector pensions manager) there are IFAs who post here, so between us we would hope to unravel the mystery (cue the music from Tales of the Unexpected).

    On your weight issue (re the other reply) ..... be happy. You are what you are - don't make yourself miserable or give yourself unachievable challenges ;) On the other hand, don't "eat yourself to death" :rolleyes: :D
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • luxor4t
    luxor4t Posts: 11,125 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Just a thought, are you still a member of a trade union? most can offer members advice on pension matters, using trained and qualified professionals. In many cases it is free or at cost.
    I can cook and sew, make flowers grow.
  • ramagel
    ramagel Posts: 61 Forumite
    Get the illustrations and post them up here (omitting your name, DOB etc - just the numbers). /quote]

    I'll do that very thing.

    I have finally after months of procrastination just printed out two letters one to each previous employer. All I have to do now is avoid procrastination about finding and envelope and paying for a stamp!

    Ta very much.
  • ramagel
    ramagel Posts: 61 Forumite
    luxor4t wrote: »
    Just a thought, are you still a member of a trade union?

    Nope. wish I had been at my last place though!
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